NT Tax Code and Form DT-Individual, Explained

If you are leaving the UK with a salary still paid from here, or living abroad with a UK pension landing in your account each month, the same question eventually comes up: why is UK tax still being deducted - and how do you make it stop? The answer, in both cases, runs through a two-letter tax code: NT.

Here is the part most explanations of the NT code skip: the gateway to it, on HMRC's own paperwork, is your position under the Statutory Residence Test. This guide covers the whole picture - what the code does, the two routes to it, and where the SRT decides whether either route is open to you.

Key points

• NT means "no tax" - gov.uk's tax-code table reads simply: "You're not paying any tax on this income"
• It is a payroll instruction to the payer, not a residence determination - HMRC's guidance notes the code is "used for all taxpayers regardless of where they live"
• Route 1 - employees going abroad for at least a complete tax year apply via form P85
• Route 2 - treaty-country residents with UK pensions, annuities, interest or royalties apply via form DT-Individual
• Form DT-Individual asks, in terms, for your position under the Statutory Residence Test; the P85 route hangs on a full-tax-year-abroad condition the SRT ultimately polices - either way, the residence test comes first and the code second
• NT covers income tax at source only: National Insurance can still be due, and UK rental income sits under a separate scheme entirely

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What an NT code actually is

Every PAYE income source - a job, a company pension, an annuity - carries a tax code telling the payer how much income tax to deduct. NT is the code that tells them to deduct none.

HMRC's internal guidance (PAYE11010) restricts NT to a specific list of cases. The two that matter for anyone reading this are income covered by a double taxation agreement and employees working abroad - but the list also includes situations with nothing to do with leaving the UK, such as bankruptcy, certain entertainment-industry engagements, and employments where only National Insurance is due. That mixed list is the first clue to what NT is and isn't: it is an administrative instruction about deduction at source, issued for a recorded reason, and removable when that reason ends. It is not a status you hold.

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An NT code is not a residence determination

The same guidance makes the point directly: tax code NT is "used for all taxpayers regardless of where they live". Having an NT code does not make you non-resident, and being non-resident does not automatically produce an NT code.

What connects the two is the claim process. Form DT-Individual - the route for pensions and other treaty income - asks the claimant to confirm, in its own words, that they "will be either non-resident or eligible for split year treatment in the UK under the Statutory Resident Test" (the spelling is the form's own), or for earlier leavers, that they expect to be non-resident under the SRT in the current year. It adds a warning with teeth: a split-year claim requires non-residence for the following full tax year, and "if this changes you must tell HM Revenue and Customs". The form even asks whether you have continued to own or rent a property in the UK since leaving, and for details if it is let out - the same facts that drive the accommodation tie and the Non-Resident Landlord Scheme.

In other words: before HMRC will consider switching off deduction at source, it wants your SRT position stated. The residence test is the input; the NT code is downstream.

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Route 1: leaving the UK with a UK employer - the P85

An employee of a UK-based employer who is going to work abroad for at least a complete tax year can apply for an NT code using form P85 (PAYE81645). Two wrinkles are worth knowing:

• Self Assessment filers mostly skip the P85 - except for this. If you are completing a return for the tax year you leave, the return establishes your residence position and a P85 is not normally needed; the NT-code application above is the one case where HMRC's guidance still points an SA filer at the P85. The P85 guide walks through who needs the form at all.
• The public P85 page never mentions tax codes. The P85-to-NT link lives in HMRC's internal manuals, which is one reason so many leavers only discover the code exists after months of deductions.

Once an NT code is in place, the effect (PAYE81670) is that earnings for work done abroad from the date of departure are paid gross of income tax but not of National Insurance contributions. The code is normally operated non-cumulatively, which means no refund of pre-departure deductions arrives until after the tax year ends - HMRC reviews the position after 5 April and repays anything due then. There is an alternative arrangement in which the employer runs two separate payroll records, under which tax deducted before departure can come back through the payroll during the year - one to raise with the employer rather than assume.

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Route 2: UK pensions and treaty income - form DT-Individual

The UK has double taxation treaties with more than 100 countries. Where the treaty gives your country of residence the taxing rights over a type of UK income, form DT-Individual is how an individual claims that relief. The form describes itself as an "application for relief at source from United Kingdom (UK) Income Tax and claim to repayment of UK Income Tax", covering "pensions, purchased annuities, interest or royalties arising in the UK".

How the claim works:

• Certification. In most cases the completed form goes to the tax authority of the country where you live, which certifies you are resident there for treaty purposes (some countries' procedure has you send it direct to HMRC instead - the form and its notes cover this).
• Timing. For pensions and annuities, relief can only be applied for once the payments have begun - the claim can't be lodged in advance of the first payment.
• One form per source. HMRC requires a new DT-Individual for each new source of income, even where one is already in place (PAYE81010).
• The result. If the claim is accepted, HMRC will "authorise non-deduction of United Kingdom tax" (DT1926) - in practice, the pension provider or other payer is instructed to pay you gross, which is where the NT code appears against that source. Relief for tax already deducted comes back as a repayment through the same claim.

One substantial exception: government service pensions - civil service and similar - are generally taxable in the UK even when you live abroad, unless the specific treaty says otherwise (DT1927); gov.uk puts it plainly: "most UK government (such as civil service) pensions are only taxed in the UK". Which article of which treaty covers which pension is exactly the territory where professional advice earns its fee.

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What an NT code does not do

• It does not decide your residence. That is the SRT's job, year by year, and an NT code survives or falls with the facts behind it - HMRC reviews NT codes and removes them when the qualifying reason has ended.
• It does not touch National Insurance. Earnings paid gross of tax can still carry NIC.
• It does not cover UK rental income. Rent has its own machinery - the Non-Resident Landlord Scheme, with its own gross-payment application.
• It is not a blanket exemption. It attaches to a specific source for a specific reason; other UK income keeps its own treatment, and what stays UK-taxable for non-residents is a longer list than most leavers expect.

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The SRT side: where your answer actually comes from

Both routes above lean on a question neither form computes for you: are you actually non-resident under the Statutory Residence Test? The SRT assesses each tax year on your UK day counts and ties - automatic tests first, then the sufficient ties test - and in the year you leave, split year treatment determines whether the year divides into a UK part and an overseas part, which is precisely what DT-Individual's departure question asks about. Getting that answer right, before the forms go in, is the part you can do today.

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The free SRT calculator works through the automatic tests and the sufficient ties test against your days and ties, following HMRC's guidance, and gives you a determination with the reasoning written out. If you'll be managing your position across visits home year after year - the situation most NT-code holders are in - the premium dashboards model your remaining days in real time.